Kuwait’s parliament unanimously called on the government to restore subsidies on diesel and kerosene because they are believed to have contributed to the price hikes of several products and services. The government removed the subsidies at the beginning of the year but the parliament wants a U-turn of the decision until after a careful evaluation.
Kuwait’s economy is based on oil and 95% of its income is generated from it. The fall of global oil prices forced the government to bring an end to the diesel and kerosene subsidies which increased local prices by a threefold. Finance Minister Anas al-Saleh said between 2004 to 2014, subsidies on fuel and services have increased to $16 billion per annum from $3 billion. Diesel and kerosene subsidies are almost equivalent to $1 billion.
Some Members of Parliament were unhappy with the effects the scrapped subsidy had on the livelihood of the Kuwaitis and called for an urgent parliamentary debate. They blame the government for failing to prevent the price hikes of basic products.
Minister Saleh informed the parliament that the government is trying to end the price hikes by shutting down businesses that increased prices. 13 companies have been closed down and more than a hundred have been referred to the prosecutors.
The parliament has decided to “suspend raising the prices of diesel and kerosene until [after] a comprehensive study” and the Oil Minister has promised to do whatever is possible about it.
Some of the Members of Parliament are still not satisfied with the return of the subsidies and are preparing to give a tough time to the prime minister and the minister of commerce, about the price hikes, when they appear in the parliament.